How it works
Write the cash list first. Then decide what the page is measuring.
- Build the yearly effective rent.
- Divide by the feet you chose.
- Use the same foot basis on every option.
- Name usable versus rentable on the slide.
Formula in words. Effective rent per foot = yearly effective rent / chosen square feet.
| Input | Meaning |
|---|---|
| Yearly effective rent | After credits |
| Foot basis | Usable or rentable |
| Load factor | If you pay for shared hall |
Worked example
Here is a teaching sample. It is not customer data and not a result from a live client.
Lease A start rent$52,000
Lease B start rent$48,360
Discount rate8%
Sample NPV A$444,758
| Metric | Lease A | Lease B |
|---|---|---|
| Start rent | $52,000 | $48,360 |
| Year-1 extras | $7,800 | $8,346 |
| Year-1 credit | $13,000 | $7,150 |
| Sample NPV | $444,758 | $426,664 |
| Year | Rent | Extras | Credit | Cash out | Value today |
|---|---|---|---|---|---|
| Year 1 | $52,000 | $7,800 | $13,000 | $46,800 | $43,535 |
| Year 2 | $53,300 | $8,034 | $0 | $61,334 | $53,074 |
| Year 3 | $54,632 | $8,275 | $0 | $62,907 | $50,638 |
| Year 4 | $55,998 | $8,523 | $0 | $64,521 | $48,313 |
| Year 5 | $57,398 | $8,779 | $0 | $66,177 | $46,096 |
| Year 6 | $59,120 | $9,042 | $0 | $68,162 | $44,166 |
| Year 7 | $60,894 | $9,313 | $0 | $70,207 | $42,318 |
| Year 8 | $62,721 | $9,592 | $0 | $72,313 | $40,546 |
| Year 9 | $64,603 | $9,880 | $0 | $74,483 | $38,849 |
| Year 10 | $66,541 | $10,176 | $0 | $76,717 | $37,223 |
| Sample NPV | — | — | — | — | $444,758 |
How to read the sample
Sample NPV for Per-foot sample is about $444,758. A second path lands near $426,664. That gap is a talking point, not a promise.
Year notes for Per-foot sample
- Year 1 of Per-foot sample has rent of $52,000.
- Shared building cost is $7,800.
- A credit of $13,000 lowers the cash you pay that year.
- Cash out this year is about $46,800. The first year is lighter after credits.
- Later cash gets a shrink for time. At 8 percent, year 1 is worth about $43,535 today.
- Next, year 2 rent is $53,300.
- CAM, which is a shared building cost, is $8,034.
- There is no credit in this year.
- You pay about $61,334 this year after extras and credits. The foot number rises as credits fade.
- Time shrinks later cash. At 8 percent, year 2 is worth about $53,074 today.
- Then year 3 rent is $54,632.
- Extras for the building come to $8,275.
- Credits skip this year.
- The net cash this year is about $62,907. The bump lifts the later average.
- Waiting has a price. At 8 percent, year 3 is worth about $50,638 today.
- After that, year 4 rent is $55,998.
- The shared building cost this time is $8,523.
- No extra credit shows up this year.
- Cash out this year is about $64,521. Later years set the long-term foot cost.
- Later cash gets a shrink for time. At 8 percent, year 4 is worth about $48,313 today.
- In year 5 of Per-foot sample, rent is $57,398.
- Shared building cost is $8,779.
- There is no credit in this year.
- You pay about $66,177 this year after extras and credits. The last year still belongs in the yearly figure.
- Time shrinks later cash. At 8 percent, year 5 is worth about $46,096 today.
- Year 6 of Per-foot sample has rent of $59,120.
- CAM, which is a shared building cost, is $9,042.
- Credits skip this year.
- The net cash this year is about $68,162. Keep this later year in the sum for the sample.
- Waiting has a price. At 8 percent, year 6 is worth about $44,166 today.
- Next, year 7 rent is $60,894.
- Extras for the building come to $9,313.
- No extra credit shows up this year.
- Cash out this year is about $70,207. The row still belongs in the sum for the long path.
- Later cash gets a shrink for time. At 8 percent, year 7 is worth about $42,318 today.
- Then year 8 rent is $62,721.
- The shared building cost this time is $9,592.
- There is no credit in this year.
- You pay about $72,313 this year after extras and credits. Keep this later year in the sum for the long path.
- Time shrinks later cash. At 8 percent, year 8 is worth about $40,546 today.
- After that, year 9 rent is $64,603.
- Shared building cost is $9,880.
- Credits skip this year.
- The net cash this year is about $74,483. The row still belongs in the sum for the long path.
- Waiting has a price. At 8 percent, year 9 is worth about $38,849 today.
- In year 10 of Per-foot sample, rent is $66,541.
- CAM, which is a shared building cost, is $10,176.
- No extra credit shows up this year.
- Cash out this year is about $76,717. Keep this later year in the sum for the long path.
- Later cash gets a shrink for time. At 8 percent, year 10 is worth about $37,223 today.
Add those year values. The sample NPV for Per-foot sample is about $444,758. This is a teaching sample, not a client result.
Trusted sources
These are public references. They are not endorsements and not client results.